Warren Buffett's 10 Favorite Stocks

NEW YORK (TheStreet) -- What do Warren Buffett, Bill Gates, Mexican telecom pioneer Carlos Helu, Spanish retailer Amancio Ortega and Oracle (ORCL) CEO and co-founder Larry Ellison have in common? They are all featured in the top 5 of the most recent Forbes Worlds Billionaires list.

Buffett, the chairman and CEO of Berkshire Hathaway (BRK.A), has been one of the most successful investors in the history of Wall Street and his run of success continued in 2013. Berkshire Hathaway netted its shareholders over $16 billion in fiscal 2013, up 40% from last year. From the day he took over Berkshire in 1965 to 2006, the company's shares averaged a 21.4% compounded annual gain in per-share book value.

The octogenarian hasn't shown any signs of slowing down. Buffett's own personal fortune increased by $12.7 billion in 2013. As the brain behind Berkshire's billion dollar investments, the moves Buffett makes on the street send ripples throughout the stock market.

Buffett is confident in his investment strategies and with his proven track record, investors can be confident in them too. This is a list of Berkshire Hathaway's top 10 holdings as of the end of 2013.

The San Fransisco multinational bank is the fourth biggest bank in the country. Buffett increased Berkshire holdings 0.07% in fiscal 2013. Wells Fargo is by far the company's biggest holding with $21.04 billion invested in the company.

TheStreet Ratings team rates WELLS FARGO & CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate WELLS FARGO & CO (WFC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, expanding profit margins, good cash flow from operations and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 31.08% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, WFC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

WELLS FARGO & CO has improved earnings per share by 9.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLS FARGO & CO increased its bottom line by earning $3.89 versus $3.36 in the prior year. This year, the market expects an improvement in earnings ($4.05 versus $3.89).

The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 93.57%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 25.85% significantly outperformed against the industry average.

Net operating cash flow has significantly increased by 72.70% to $14,423.00 million when compared to the same quarter last year. Despite an increase in cash flow of 72.70%, WELLS FARGO & CO is still growing at a significantly lower rate than the industry average of 167.25%.

The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, WELLS FARGO & CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

The Atlanta based beverage manufacturer is one of the most best known and far reaching companies in the world. Berkshire held its holdings in Coca-Cola flat in fiscal 2013. Buffet is on record saying he will never sell his shares in the company. One can see why when Coca-Cola is the stock with the fifth highest dividend yield for Berkshire at 2.93%

TheStreet Ratings team rates COCA-COLA CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate COCA-COLA CO (KO) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

The gross profit margin for COCA-COLA CO is rather high; currently it is at 65.74%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.48% trails the industry average.

Net operating cash flow has remained constant at $2,830.00 million with no significant change when compared to the same quarter last year. In addition, COCA-COLA CO has modestly surpassed the industry average cash flow growth rate of -5.45%.

COCA-COLA CO's earnings per share declined by 7.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, COCA-COLA CO reported lower earnings of $1.90 versus $1.96 in the prior year. This year, the market expects an improvement in earnings ($2.10 versus $1.90).

KO, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 3.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Beverages industry and the overall market, COCA-COLA CO's return on equity significantly exceeds that of both the industry average and the S&P 500.

Based in New York City and traded as one of the 30 components of the Dow Jones Industrial Average, American Express was founded in 1850. Fortune lists it one of the top 20 Most Admired Companies in the world. As of 2009, Amex cards accounted for 24% of the total dollar volume of credit card transactions in the United States. MUST Read:Warren Buffett's Annual Letter to Shareholders

TheStreet Ratings team rates AMERICAN EXPRESS CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERICAN EXPRESS CO (AXP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

AMERICAN EXPRESS CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERICAN EXPRESS CO increased its bottom line by earning $4.88 versus $3.87 in the prior year. This year, the market expects an improvement in earnings ($5.48 versus $4.88).

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Consumer Finance industry. The net income increased by 105.3% when compared to the same quarter one year prior, rising from $637.00 million to $1,308.00 million.

Despite its growing revenue, the company underperformed as compared with the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.

The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Consumer Finance industry and the overall market, AMERICAN EXPRESS CO's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

Powered by its strong earnings growth of 116.07% and other important driving factors, this stock has surged by 44.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

This multinational technology and consulting firm was one of the early pioneers of personal computing. Founded in 1911, the company has stood the test of time and continues to be on the cutting edge of the technological revolution. With over 435,000 employees worldwide it is the second largest U.S. company in terms of employees. IBM's dividend yield of 2.05% is in the top 20 of Berkshire Hathaway's holdings.

TheStreet Ratings team rates INTL BUSINESS MACHINES CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTL BUSINESS MACHINES CORP (IBM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, good cash flow from operations, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

INTL BUSINESS MACHINES CORP has improved earnings per share by 11.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, INTL BUSINESS MACHINES CORP increased its bottom line by earning $15.02 versus $14.41 in the prior year. This year, the market expects an improvement in earnings ($18.00 versus $15.02).

The gross profit margin for INTL BUSINESS MACHINES CORP is rather high; currently it is at 56.58%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 22.32% trails the industry average.

Net operating cash flow has slightly increased to $6,528.00 million or 2.86% when compared to the same quarter last year. Despite an increase in cash flow, INTL BUSINESS MACHINES CORP's cash flow growth rate is still lower than the industry average growth rate of 21.79%.

The net income growth from the same quarter one year ago has exceeded that of the IT Services industry average, but is less than that of the S&P 500. The net income increased by 6.0% when compared to the same quarter one year prior, going from $5,833.00 million to $6,184.00 million.

Despite the weak revenue results, IBM has outperformed against the industry average of 20.8%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

This Cincinnati based consumer goods company is one of Fortune magazine's 15 Most Admired Companies in the world. 26 of P&G's brands have at least a billion dollars in annual sales and the company's reach stretches from beauty products to health care.

TheStreet Ratings team rates PROCTER & GAMBLE CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate PROCTER & GAMBLE CO (PG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

PG's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 0.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

The current debt-to-equity ratio, 0.51, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that PG's debt-to-equity ratio is low, the quick ratio, which is currently 0.50, displays a potential problem in covering short-term cash needs.

PROCTER & GAMBLE CO's earnings per share declined by 15.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PROCTER & GAMBLE CO increased its bottom line by earning $3.87 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($4.21 versus $3.87).

The gross profit margin for PROCTER & GAMBLE CO is rather high; currently it is at 53.76%. Regardless of PG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PG's net profit margin of 15.38% compares favorably to the industry average.

In its most recent trading session, PG has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

The Texas oil company is the world's third largest company based on revenue. A descendant of John D. Rockefeller's oil empire, Exxon Mobile has a long history of success. Exxon has 37 refineries in 21 countries that combined produce 6.3 million barrels of oil a day. That's enough to make the company the world's largest oil refiner.

TheStreet Ratings team rates EXXON MOBIL CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate EXXON MOBIL CORP (XOM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues slightly increased by 8.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

EXXON MOBIL CORP's earnings per share declined by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, EXXON MOBIL CORP reported lower earnings of $7.37 versus $9.70 in the prior year. This year, the market expects an improvement in earnings ($7.75 versus $7.37).

The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 16.1% when compared to the same quarter one year ago, dropping from $9,950.00 million to $8,350.00 million.

Wal-Mart is the largest retailer in the world, the world's second largest public company and the second largest public employer. In fiscal 2009 it generated 51% of its sales from its grocery business. The Arkansas-based company experienced meteoric success in the 90's that hasn't slowed down since

TheStreet Ratings team rates WAL-MART STORES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate WAL-MART STORES INC (WMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

WMT's revenue growth has slightly outpaced the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Net operating cash flow has slightly increased to $9,937.00 million or 2.61% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.91%.

WAL-MART STORES INC's earnings per share declined by 19.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, WAL-MART STORES INC reported lower earnings of $4.86 versus $5.01 in the prior year. This year, the market expects an improvement in earnings ($5.35 versus $4.86).

In its most recent trading session, WMT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market, WAL-MART STORES INC's return on equity exceeds that of both the industry average and the S&P 500.

This Minneapolis based multinational financial firm is the fifth largest bank in the U.S. and currently accounts for $364 billion in assets. It employs over 60,000 people and serves 25 Midwestern states.

TheStreet Ratings team rates U S BANCORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate U S BANCORP (USB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, expanding profit margins, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

U S BANCORP has improved earnings per share by 5.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, U S BANCORP increased its bottom line by earning $3.01 versus $2.84 in the prior year. This year, the market expects an improvement in earnings ($3.15 versus $3.01).

The gross profit margin for U S BANCORP is currently very high, coming in at 87.21%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.87% significantly outperformed against the industry average.

The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

The net income growth from the same quarter one year ago has exceeded that of the Commercial Banks industry average, but is less than that of the S&P 500. The net income increased by 2.5% when compared to the same quarter one year prior, going from $1,420.00 million to $1,456.00 million.

Despite the weak revenue results, USB has outperformed against the industry average of 15.8%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

This California based broadcast satellite service provider is the top dog in the satellite broadcasting space. Direct TV finished 2013 with 20.25 million subscribers and added 93,000 subscribers in the fourth quarter despite raising prices.

TheStreet Ratings team rates DIRECTV as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate DIRECTV (DTV) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

DTV's revenue growth has slightly outpaced the industry average of 4.4%. Since the same quarter one year prior, revenues slightly increased by 6.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Compared to its closing price of one year ago, DTV's share price has jumped by 57.11%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, DTV should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

Net operating cash flow has increased to $2,039.00 million or 35.84% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.25%.

DIRECTV' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DIRECTV increased its bottom line by earning $5.19 versus $4.61 in the prior year. This year, the market expects an improvement in earnings ($5.93 versus $5.19).

44.72% is the gross profit margin for DIRECTV which we consider to be strong. Regardless of DTV's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 9.42% trails the industry average.

As the only health care tech company in the Berkshire top 10 holdings, Buffett seems fully invested in Davita. Buffett increased his holdings in the company by 15.9% in the fourth quarter of last year alone. Seems like he has big plans for the company moving forward into 2014.MUST Read:Warren Buffett's Annual Letter to Shareholders

TheStreet Ratings team rates DAVITA HEALTHCARE PARTNERS as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate DAVITA HEALTHCARE PARTNERS (DVA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, compelling growth in net income, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues rose by 23.6%. Growth in the company's revenue appears to have helped boost the earnings per share.

DAVITA HEALTHCARE PARTNERS has improved earnings per share by 31.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DAVITA HEALTHCARE PARTNERS increased its bottom line by earning $2.90 versus $2.73 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $2.90).

The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 36.2% when compared to the same quarter one year prior, rising from $155.84 million to $212.28 million.

Net operating cash flow has significantly increased by 76.88% to $354.19 million when compared to the same quarter last year. In addition, DAVITA HEALTHCARE PARTNERS has also vastly surpassed the industry average cash flow growth rate of -34.07%.

Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.